Kleist Comments

MORNING GRAINS 2/07/14
MORNING GRAINS 2/07/14

Corn:

Exports: Sold Unknown 141,200t old crop.

Comments: Export demand has backgrounded the mini-bull move and added to that estimates that carryover will fall from 1.631bln. to 1.606 (avg.)…….26mln.bu.? And the bull’s shorts are knotted because of that? I’m a stranger in paradise then. Otherwise, being neutral speculatively allows that type of sarcasm. Maybe we are going to $5.00 March but I am having problems well before at $4.50. As usual I do not ‘bet’ reports but neither risk hedges by covering. A post-report sharp rally will be a good time for marketing. Open interest rose 7,200 even as March falls 16,700 amid very strong volume….the battle heats up.

SOYBEANS:

Exports: None Visible.

Comments: Carryover stocks more “defensible” perhaps with 143 mln.bu. (avg.) vs. last report of 150mln. as a need to ‘ration’ old crop supplies. If not for a possible big, big crop in South America it would make more sense, or IF every bean purchased here will be hidden and buyers will buy South American in the same way. To hell with economics 101. Damn the torpedo’s, full speed ahead! In other news: Macquarie Bank in a visit to Brazil said early yields better than normal and “efficiencies in ports” will make for a ‘far easier’ export program; heard Brazil beans are a $.70-1.00 discount to the U.S. on our eastern coast; open interest rose another 20,400 after the previous days rise of 10,400=30,800 in TWO DAYS? I think its funds vs. commercials and therefore if one is a gunslinger, pick which one wishes to be aligned with: the pistoliros or the sheriff? One thing, do not bet on hedges.

Wheat:

Exports: None Visible.

Comments: Wire services say wheat was higher do to an outlook for lower ending stocks: avg. est. 602mln.bu. vs.608mln. last month. 6mln.bu.? Will make a difference? My take on this rally remains fund-shortcovering driven in large part with light new buying added in. No fresh news.

The U.S. winter wheat crop always a dice-shoot this early but no overtly damaging weather. Open interest rose 1,700 even as March falls another 5,400 amid good volume.

Kleist Comments

This is John Kleist, of Kleist Ag Consulting.
Questions? Email me: johnwkleist@sbcglobal.net

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